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INCOME INEQUALITY, RECIPROCITY AND PUBLIC GOOD PROVISION: AN EXPERIMENTAL ANALYSIS
Author(s) -
Hofmeyr Andre,
Burns Justine,
Visser Martine
Publication year - 2007
Publication title -
south african journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.502
H-Index - 31
eISSN - 1813-6982
pISSN - 0038-2280
DOI - 10.1111/j.1813-6982.2007.00127.x
Subject(s) - endowment , reciprocity (cultural anthropology) , public good , public goods game , economics , inequality , sample (material) , economic inequality , public economics , order (exchange) , microeconomics , demographic economics , labour economics , political science , psychology , social psychology , finance , mathematical analysis , chemistry , mathematics , chromatography , law
This paper analyses the impact of income inequality on public good provision in an experimental setting. A sample of secondary school students were recruited to participate in a simple linear public goods game where income heterogeneity was introduced by providing participants with unequal token endowments. The results show that endowment heterogeneity does not have any significant impact on contributions to the public good, and that consistent with models of reciprocity, low and high endowment players contribute the same fraction of their endowment to the public pool. Moreover, individuals appear to adjust their contributions in order to maintain a fair share rule.